Australia’s economic diplomacy

The government’s economic diplomacy agenda raises the prominence of Australia’s economic interests in our international engagement. It focuses on the building blocks of prosperity: trade, growth, investment and business.

“If the goal of traditional diplomacy is peace, then the goal of economic diplomacy is prosperity” Julie Bishop | Address to the Sydney Institute | Sydney | 2014

Australia’s prosperity is more connected than ever to developments in the global economy. Our trade with the world is equivalent to 42% of our GDP – a number that hasn’t dropped below 25% since 1900. The stock of foreign investment in Australia is at record highs of A$2.5trillion, while Australia’s investments around the world total A$1.6trillion. Australia has the world’s 5th highest GDP per capita and has the 12th largest economy. But to sustain this performance requires strong international engagement.

Economic diplomacy directly supports the prosperity of Australians. Australia has a strong economy, built on our tradition of trading with the world, strong flows of international investment, a dynamic private sector, and a consistent program of economic reform. Sustaining our prosperity into the future will require strong economic diplomacy in support of our global economic interests.

The government’s economic diplomacy agenda raises the prominence of Australia’s economic interests in our international engagement. It focuses on the building blocks of prosperity: trade, growth, investment and business.

The Department of Foreign Affairs and Trade is leading implementation of this agenda, working with portfolio partners;

Austrade

The Australian Centre for International Agricultural Research (ACIAR)

Tourism Australia

Efic and

Key economic agencies at our overseas posts.

The economic diplomacy agenda builds on the portfolio’s long-standing work liberalising trade, supporting global growth, promoting investment and advancing the interests of Australian business overseas. It leverages our strong international networks, our global diplomatic assets, and our highly trained staff.

Four pillars of Australia’s economic diplomacy

1. Trade

2. Growth

3. Investment

4. Business

“The Australian Government is committed to economic diplomacy – to opening up the Australian economy, to empowering private sector growth, to encouraging investment and creating conditions for business partnerships to flourish and trade to flow” Andrew Robb | Speech to US-Australia Dialogue | Los Angeles | 2014

1. Trade

Pursue trade liberalisation through bilateral, regional and global trade agreements that open up new markets for Australian exporters and sustain a strong, rules based architecture for global trade The Government has established an ambitious trade agenda, pushing for greater trade liberalisation—both multilaterally and through free trade agreements. See DFAT’s trade section for more on Australia’s trade agenda.

2. Growth

Support global growth, including by using Australia’s aid programme and other measures to promote economic reform and infrastructure, and through regional and global economic cooperation forums. In the G20, Australia is leading efforts to increase GDP growth across the developed and developing world. Our development activities will prioritise programmes that support economic growth as a path to development. See DFAT’s aid section for more on Australia’s development programme. See Australia’s G20 website for more on the G20.

3. Investment

Promote investment into Australia and Australian investment internationally. Australia’s prosperity has been built on two centuries of international investment. Attracting productive international investment will create new jobs and new industries to support our future prosperity. Our development activities help developing countries attract international investment. See DFAT’s investment section for more on Australia and foreign investment.

4. Business

Advance the interests of Australian business overseas, the development of a stronger private sector in our region, and promote Australian tourism. The Government is committed to supporting Australian businesses in Australia and overseas. Our development activities promote sustainable growth in the private sector in developing countries. We promote Australian tourism in line with the government’s Tourism 2020 strategy. See the business engagement page for more on how the foreign affairs and trade portfolio works with business.

Agreements with ASEAN, Chile, Malaysia, New Zealand, Singapore, Thailand and the United States provide Australian producers with a competitive advantage in these markets, which between them cover 28 per cent of Australia’s total trade.

Recently negotiated agreements with South Korea—our third largest export market—and Japan—our second-largest two-way trade partner—will help Australian exporters remain competitive while delivering savings to Australian consumers on high-value imports, including cars and consumer electronics.

Current negotiations include China, the Trans-Pacific Partnership Agreement (TPP) and the Regional Comprehensive Economic Partnership. China is our largest export destination, while in 2012-13 close to 34 per cent of Australia’s total trade occurred in the TPP region.

Agricultural trade and Indonesian food security

The Australian Government is supporting growth in agricultural trade with Indonesia while promoting Australia’s ability to contribute to Indonesia’s food security agenda

Programmes run from the Jakarta Embassy are positioning Australia as a food supplier of choice in Indonesia.

Australia’s development programmes are delivering substantial benefits to Indonesian farmers and their communities by working with agribusinesses to improve farmer practices and strengthen access to agricultural markets.

The Australian Centre for International Agricultural Research’s initiatives are helping Indonesia’s agriculture sector improve productivity and food quality.

Additionally in the red meat and cattle sector the Indonesia-Australia Partnership for Food Security, a joint government and industry initiative, is supporting increased investment and agricultural cooperation between Australia and our largest neighbour.

Promoting Tourism and Investment with the USA and India

The Australian Government promotes Australian investment and tourism in established and emerging markets.

In the US, the joint initiative of government and the private sector, G’Day USA, is supported by the Department of Foreign Affairs and Trade, Austrade, Tourism Australia, state and territory governments, Qantas and other Australian businesses. It aims to grow Australian tourism, trade and investment, public policy and research collaboration.

In India, Australia’s High Commission in New Delhi, and Consulates-General in Chennai and Mumbai, are working to promote Australia as an investment destination, and with Tourism Australia and state tourism offices to promote Australia as a preferred leisure destination for India’s burgeoning middle class.

Tourism Australia’s India 2020 Strategic Plan sets a foundation for the future when long-haul leisure travel by middle-class Indians becomes more common, including a focus on cricket tourism for the Australia and New Zealand-hosted 2015 Cricket World Cup.

Private Sector Assistance and Financial Inclusion in the Pacific

Through the aid programme, the Australian Government is committed to supporting private sector growth and improving access to financial services for our development country partners.

Around 80 per cent of Pacific Islanders do not have access to basic financial services, like a bank account. Thanks to Australian support, over 500,000 people, including over 200,000 women, now have access to mobile money in Papua New Guinea, Vanuatu, Samoa and Fiji.

Australian Government support for the Pacific Private Sector Development Initiative, alongside the Asian Development Bank and the New Zealand Government, has reformed the Companies Acts in Samoa, Solomon Islands and Tonga. This has led to a doubling of the number of new companies being incorporated.

In Solomon Islands, registering a business now takes one day, and has resulted in a jump of 38 places in the World Bank’s Ease of Starting a Business indicator.